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Housing is Moving Urban with new Generation Y Millennial Home Buyers

Americans who are between the ages of 18 and 34 — known as Generation Y Millennials — could be a “game changer” in the U.S. real estate market, according to Urban Land Institute. As such, ULI researchers are taking careful note of this generation’s preferences when it comes to homes. The Urban Land Institute ULI reports Generation Y, with nearly 80 million members, as a potential “game changer” in the U.S. real estate market.

Of Millennials surveyed in that age range, 59% said they prefer their neighborhood to have a variety of housing types; 62% favor mixed-use developments with shops, restaurants and offices; and 52% like pedestrian-friendly neighborhoods.A new ULI survey of about 1,200 Millennials shows that 59 percent of those surveyed prefer a home in a neighborhood that has a variety of housing types. 55% of Generation Y respondents also said close proximity of their home to public transportation is important. The survey found that Generation Y is more likely than older generations to live in apartments and in downtown urban areas, with 54% favoring renting and 39% favoring city living.

Patrick Phillips, ULI’s chief executive, says he believes the Millennials represent a big change from other generations, in that this group will continue to prefer more compact, urban homes, even later in life. He says that will likely lead to more mixed-use development. “Over time, we’ll see a return to a more compact, metropolitan development pattern,” Phillips said. “We’ll see less sprawl at the edges ... the market preferring solutions that are closer in.”

Ms. Shi, a Millennial in her 20's, confirmed the Generation Y urban trend stating, “In my 20s, I definitely want to live downtown; I like the whole high-rise, in-the-city feel,” “But, definitely when I have children, I want to live in a single-family home. It’s easier for parking, transportation and it’s safer to live in the suburbs away from the city. I definitely want a back yard.” Millennials seem to be more likely to purchase condos, lofts, high rises, townhomes, and trendy apartments in urban villages and mixed use walkable districts.